Internet usage persists in skyrocketing, with 29.3 billion networked machines projected to be in use by 2023 and the growth rate presently at around 10%. Today, an industry startup called DriveNets that’s made a more cost-effective method for service providers and further outsized connectivity users to climb to meet that request by leveraging software and cloud inventions and not relying solely on hardware is reporting a big round of funding, a mark of the rising demand it’s seeing for its tech.
The Israeli startup delivers software-based internet routing solutions to service providers to drive them as virtualized services over “white box” generic architecture. Today, Drivenets is declaring $262 million in equity funding to develop its technology, geographical footprint, and business development.
The organization works with close to 100 customers, big networking service providers like AT&T that collectively deliver services to millions of others — and in the last year, has visited network traffic over its cloud-based architecture grown 1,000%.
This Series C is being led by D2 Investments, a special investment fund with LPs from the U.S. and the United Emirates; existing backers Bessemer Venture Partners, Pitango, D1 Capital, Atreides Management, and Harel Insurance Investments & Financial Services are also partaking.
D1 (Daniel Sundheim’s fund, with no connection to the current authority investor despite the similarity of names) led DriveNets’ previous round, a Series B of $208 million last year, which catapulted the startup to its $1 billion+ valuation.
In the Previous funding round, Routing solutions-based software provider drivenets has closed a $208M series B round in funding, and now the company’s total valuation reached $1B.
Ido Susan, the CEO who co-founded the business with Hillel Kobrinsky, tells me the business is not disclosing an exact valuation figure this time except to say that it “has substantially improved over the prior round.”
Many of our clients are tier 1 and 2 service providers, and we uncovered that Asian operators are earlier adopters and extend to new technologies that can rev expansion and lower their cost,” said Susan this week. A lot of initial concentration is around cost-cutting. The pitch DriveNets makes is that as markets deliver more network capacity increase, service providers commonly have to buy many tools (and go through the costly and time-consuming process of publishing those tenders and negotiating deals).
Networking as it lives pre-DriveNets is primarily concentrated on costly hardware. The startup’s pitch is that it can substitute that with its proprietary sophisticated operating system, which depends on a cloud-based architecture that can operate in conjunction with a more affordable and more straightforward system of generic network equipment that sits in a provider’s data center. The control (pun intended) works out to cost savings on average of 40%, Susan told me in the history.
The operating system has a ton of various functionality, covering the core, aggregation, peering, cable, data center interconnection, edge computing, and cloud services, and this indicates, Susan said, that while consumers come for the bargains, they remain for the services, “since our model is software-based we encourage faster innovation and service rollout.”
Now it is not a point of but of when since incumbent dealers deliver more to fail over that change, he added. He acknowledges that DriveNets will appear as an authority in the networking vendor space, nonetheless, not least due to being able to invest in further expansion on the back of funding rounds like this one.
We are sustaining our current answer to guarantee that we keep ahead of the condition but also resume to add expected capabilities, said Susan. He notes that the business was the first to sustain Broadcom’s latest chipset and better than threefold the network capacity but also led the evolution to 400Gig. Similarly, he said that we are already investing in different resolution offerings that will supply additional value to our consumers and expand our TAM.
The biggest challenge is not technical, per se. Still, one of their talents is “drafting quality people to sustain our engineering efforts and our global expansion. At the end of the day, it is all concerning the people,” he said. The company has been using a skill from Juniper and Salesforce, among others, to fuel its expansion.
“DriveNets has already made a big impact in the high-scale networking industry, and tier-1 operators adopt its routing solutions for their grade and the creation they enable,” said Aaron Mankowski, management partner at Pitango, in a statement. This investment will allow DriveNets to develop its market footprint and other offerings.
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